- 5 Steps for Buying a Home Without a Realtor
- 1. Research
- 2. Communication
- 3. Negotiation
- 4. Organization
- 5. Attention to Detail
- Explore More Home Buying Tips at NewHomeSource.com
- Do I Need A Real Estate Agent To Buy New Construction?
- Provide Representation Because It Is Important
- Negotiate On Buyers Behalf
- Contract Contingencies & Inspections
- Make Recommendations On Improvements & Upgrades
- Recommend A Quality Lender & Financing Options
- Keep The Transaction & Build On Schedule
- Final Thoughts
- Other New Construction Resources & Articles
- 14 Tips for First-Time Home Buyers
- 1. Start saving early
- 2. Decide how much home you can afford
- 3. Check and strengthen your credit
- 4. Explore mortgage options
- 5. Research first-time home buyer assistance programs
- 6. Compare mortgage rates and fees
- 7. Get a preapproval letter
- 8. Choose a real estate agent carefully
- 9. Pick the right type of house and neighborhood
- 10. Stick to your budget
- 11. Make the most of open houses
- 12. Pay for a home inspection
- 13. Negotiate with the seller
- 14. Buy adequate home insurance
5 Steps for Buying a Home Without a Realtor
There was a time when would-be homebuyers wouldn’t consider shopping fora home without a real estate agent by their side. Times have changed. Thanks inpart to the plentiful resources available online, many home shoppers areforegoing the assistance of a real estate agent, and are researching, visitingand bidding on homes all on their own.
If you are planning to build a new home, it is possible to close the deal without the help of a Realtor. Read on to find out what it takes to buy a new home without a real estate pro representing you.
Buying a home requires a lot of research. For new construction homes inparticular, you’ll need to research home styles, availability, pricing,development locations, builder reputation and quality, and mortgage rates andoptions, at the very least.
The National Association of Home Builders (NAHB) advises taking the time to research from the start: “Youshould shop for your builder as carefully as you shop for your home. Whetheryou are buying a condo, a townhouse, a house in a subdivision or a custom-builthouse, you want to know that you are buying a good quality home from areputable builder.”
If you’re someone who doesn’t mind doing this type of research and keeping at it when questions come up along the way that require more research, you’ve got a good foundation for buying a home without a real estate agent.
Be prepared to do a lot of communicating if you are buying a house without Realtor representation.
In addition to having plenty of questions for the builder, you will need to speak with mortgage or construction loan lenders, home inspectors, a title agency and possibly a real estate attorney, to name a few.
It’s not enough to simply ask questions or follow directions, you will need to know the right questions to ask and comprehend the answers and what that means for you.
Depending on whether you are custom designing a home or buying a newly constructed home, you’ll have even more questions and can expect a lot of back and forth with the builder. If you learning about new things, speaking with people and analyzing your options, this can be a great learning experience.
“Closing a home can be a verystressful time for buyers,” says Teri Wilber, customer experiencecoordinator for Grenadier Homes in Dallas, Texas. “Communication withthe sales counselor and builder is a key factor in helping easeanxiety. When the buyer is informed throughout the process, the stress isgreatly reduced.”
Negotiating the sales price is arguably the most well known of a Realtor’sservices. If you think there’s no need to negotiate when buying a new constructionhome, think again. There is always room for negotiation in a home sale.
Builders typically won’t drop their sale price because it sets precedent forthem to do the same for future buyers, but they can often be negotiated with“at the back end.
” A builder may be willing to pay for closing costsor throw in upgrades or extras at no charge to make the sale.
You don’t have to be a debate pro to handle home sale negotiations, but it helps to have the confidence to ask for upgrades or deals and to know when to accept an offer or walk away.
A home sale comes with plenty of paperwork. You have to keep track of the building or sale contract as well as the various deadlines throughout the process: professional services to schedule and upgrades, options and change orders to track and manage. This doesn’t even include all of the paperwork and requests you’ll be receiving from the lender!
Are you someone who is well-organized enough to stay on top of deadlines and due dates, return calls when needed, meet with service providers, schedule inspections and know what needs to happen and when to keep the transaction moving forward? If so, then you can surely keep the many parts of a real estate transaction moving forward. If not, hire a real estate agent to do this for you.
5. Attention to Detail
How are you with the fine print? Home purchase contracts are pretty muchentirely fine print. While existing home sale contracts are usually fairlystandard, that’s not always the case with builders. Each builder may have theirown contract and way of presenting information. You need to be able to readthrough that information, digest it and understand what it means for you.
Contracts will specify things the sale price and any upgrades or special terms you’ve negotiated, the closing date and closing requirements (including any money you will be required to bring to the closing), and any covenants or restrictions on the property, among others. You’ll also need to read through documents from the lender, which contain information about your mortgage rate, loan amount and payment terms. You’ll also have documents to review and sign from your home insurance provider.
Explore More Home Buying Tips at NewHomeSource.com
Explore NewHomeSource for more articles full of homebuyingadvice. Find information on working with builders, financing your new home,moving tips and more!
Liyya Hassanali is a Project Manager and Content Strategist for Kinship Design Marketing, a boutique agency that provides marketing strategies and content for architects, interior designers, and landscape designers. She is a 15+ year veteran of the marketing and advertising industry, working closely with her clients to provide written content that meets their marketing goals and gets results.
Liyya is passionate about home design and décor and is a confessed HGTV and Pinterest addict. When not providing content writing services for her clients, she can be found browsing home décor sites or spending time with her family.
Do I Need A Real Estate Agent To Buy New Construction?
Do I Need A Real Estate Agent To Buy New Construction
One of the first decisions that must be made in the home buying process is whether to buy an existing home or build a new home. If you decide that you would to explore the new construction route, the next decision that needs to be made is whether or not you want a real estate agent.
Depending on the rules and regulations of your state, you may or may not need a real estate agent when buying new construction. The majority of states allow a buyer to choose if they want to use a real estate agent or if they do not want to use a real estate agent when buying new construction.
In most situations, there are way more reasons why you should hire a real estate agent when buying new construction rather than attempting it without a real estate agent. It’s very important to know that when buying new construction and if you decide to hire a real estate agent that you are registered with the builder representative before meeting with them.
Below are some of the most important reasons to hire a real estate agent when buying new construction. Read on to find out why using a real estate agent can save you time, money, and frustration when buying new construction!
Provide Representation Because It Is Important
When buying new construction many buyers believe it’s a good idea to not have a real estate agent and to use the builder representative. The thought process behind this real estate myth is that it can save them money which is absolutely false.
What a buyer is doing by working with the builders representative is working with someone who is not representing them but instead is representing the builder. The builders representative is working in the best interest of the builder, not a buyer. Having representation is critical whether buying new construction or an existing home.
It’s important that when hiring a real estate agent to represent you in the purchase of a new construction home that you know ask the right questions. Having an experienced buyers agent is important when buying an existing home but having a real estate agent who has experience with new construction is critical.
To help increase the chances you hire a real estate agent who has experience with new construction, it’s important you know what questions to ask real estate agents.
Some of the questions to consider asking real estate agents when buying new construction include;
- Are you familiar with the new construction process?
- Do you have any lenders who specialize in new construction loans?
- Why do I need you to buy new construction?
- How many new construction homes have you sold in the past?
Negotiate On Buyers Behalf
Hiring A Real Estate Agent Can Help Prevent Getting Ripped Off When Buying New Construction
Buying new construction can get pretty expensive and in a hurry. Most builders will advertise their base price of their new homes and in most cases, this price is for the basic “plain Jane” home.
One of the benefits to buying new construction is the ability to make it your own. With the customization of a home comes an increase in the price. Another reason to hire a real estate agent when buying new construction is their ability to negotiate on your behalf.
Most builders will have a list of prices for upgrades and changes to their floor plans. A real estate agent who has experience with new construction can help negotiate the prices of these upgrades and changes to floor plans.
Contract Contingencies & Inspections
There are tons of reasons why having a home inspection is important when buying an existing home, but it’s also very important to have a home inspection when buying new construction. Many buyers who are purchasing new construction believe that since the home is brand new that they don’t need an inspection.
Another reason to hire a real estate agent when buying new construction is the reality that they know what inspections to recommend to a buyer.
For example, if a new build has a septic system it would be advantageous and recommended to make the contract contingent on a septic inspection.
The last thing that a buyer wants to have happen when buying a new home is they move into the home and there is a serious issue with the plumbing because of a faulty septic system.
This is only one example of a real estate contract contingency that a real estate agent can suggest to a buyer when buying new construction. It’s highly recommended to perform various inspections on new construction before the closing occurs.
Make Recommendations On Improvements & Upgrades
Generally a buyer is given an allotment for things such as lighting fixtures, carpet choices, cabinetry, counter tops and other home features.
Real estate professionals know what home features today’s buyers are looking for in a home.
One of the worst things that a buyer can do when building a home is spend lots of money on upgrades and improvements that may hurt the value of the home when the time comes to sell the home.
Hiring a real estate agent when buying new construction can help reduce the chance that a buyer spends money on a silly upgrade or improvement. An experienced real estate agent can help a buyer understand the cost of an upgrade versus the potential return on investment.
Most buyers don’t think about the long term effect that home improvement projects can have on value of a home. While the majority of buyers aren’t thinking about already selling their home when buying it, a real estate agent can help a buyer stay aware of the effect an upgrade can have on the resale value.
Recommend A Quality Lender & Financing Options
Real Estate Professionals Can Provide Financing Recommendations For New Construction Loans
Another great reason to use a real estate agent when buying new construction is their ability to recommend a quality lender. The financing for new build homes is much different than getting a mortgage for an existing home.
Financing for new construction is not offered by all lenders. It’s recommended that you try and utilize a local lender when buying a new build. A real estate agent who has experience with new construction will be able to give a couple recommendations to lenders who offer new construction loans.
One of the major differences of new construction loans is that the lender will make periodic payments to the builder as progress is being made on the home. These are sometimes referred to as “draws.
” A buyer will make payments to the lender while the home is being built and upon completion the buyer will get a new mortgage.
The buyers new mortgage will payoff the construction loan and becomes the financing the buyer will have for the life of their loan.
Keep The Transaction & Build On Schedule
Buying new construction is a pretty complex process. There are many moving parts and it can be easy for the transaction and/or build to get off track.
Another excellent reason to hire a real estate agent when buying new construction is the ability an experienced agent will have to keep the transaction and/or build on track. There are many reasons why real estate closings are delayed with existing homes and with new builds there are even more.
Depending on factors such as the size of a home, weather, and the builder, new homes can take a few months to a year to build.
Generally speaking you should expect a new home to be built in 12-14 weeks. Below is an idea of what happens during the 12-14 week time frame.
- Week 1 – Site Preparation – During the first week the area where the new home is being built is prepared for the build phase. This includes the clearing of the lot, excavation, and leveling of the lot.
- Week 2-5 – Foundation – During this 4 week process the bones of the new home are built. This means the footers are installed, followed by the foundation, and last but not least the homes frame is built.
- Week 6-8 – Mechanics & Interior – During the next 3 weeks the homes mechanics are put in place. This generally means the homes HVAC is installed, electrical wiring is run, and the homes plumbing is put in place. Once this is completed, the homes insulation and drywall is installed.
- Week 9-11 – Flooring & Paint – Over the next 3 weeks, the homes flooring, doors, and cabinetry are installed. At this time the interior of the home is painted as well.
- Week 12-14 – Fixtures, Appliances, Landscaping – The final 3 weeks is when the homes light fixtures, faucets, appliances, and landscaping is installed.
- Week 14 – Final Walk Through – Once the home is completed, the buyer will do a final walk through in addition to the municipalities inspector with the builder prior to issuing the certificate of occupancy, also known as a C of O.
It’s important to understand that the above timeline for new construction can vary. As you can see there are many moving parts and stages of new construction. It’s a good idea to have an experience real estate agent when buying a new home so that everything stays on track for a smooth transaction and closing.
If you decide that you’d to buy new construction, as you can see, there are lots of benefits to hiring an experience real estate agent. It’s strong recommended that you do not attempt it without representation. Having a professional working on your behalf can go a long way and save you lots of time, money, and additional stress.
Other New Construction Resources & Articles
Are you thinking of buying new construction in Rochester? If so, it’s important that you have quality representation throughout the process. I’d love the opportunity to discuss the Rochester real estate market and the new construction process. Contact me via e-mail at [email protected] or by phone at 585-347-1863.
About the authors: The above article “Do I Need A Real Estate Agent To Buy New Construction?” was provided by the Keith Hiscock Sold Team (Keith & Kyle Hiscock). With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise.
We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.
Visit our website at www.HiscockHomes.com.
© 2015 – 2019, Kyle Hiscock. All rights reserved.
14 Tips for First-Time Home Buyers
any big project, a successful homebuying experience is all about getting the details right from start to finish. These tips for first-time home buyers will help you navigate the process, save money and close the deal. We organized them into four categories:
Get answers to questions about your mortgage, travel, finances — and maintaining your peace of mind.
1. Start saving early
Here are the main costs to consider when saving for a home:
Down payment: Your down payment requirement will depend on the type of mortgage you choose and the lender. Some conventional loans aimed at first-time home buyers with excellent credit allow as little as 3% down.
But even a small down payment can be challenging to save. For example, a 3% down payment on a $300,000 home is $9,000.
Use a down payment calculator to decide a goal, and then set up automatic transfers from checking to savings to get started.
Closing costs: These are the fees and expenses you pay to finalize your mortgage, and they typically range from 2% to 5% of the loan amount. You can ask the seller to pay a portion of your closing costs, and you can save on some expenses, such as home inspections, by shopping around.
Move-in expenses: You'll need some cash after the home purchase. Set some money aside for immediate home repairs, upgrades and furnishings.
» MORE: How to save money for a house
2. Decide how much home you can afford
Figure out how much you can safely spend on a house before starting to shop. NerdWallet's home affordability calculator can help with setting a price range your income, debt, down payment, credit score and where you plan to live.
» MORE: Learn about how to save for a down payment
3. Check and strengthen your credit
Your credit score will determine whether you qualify for a mortgage and affect the interest rate lenders will offer. Take these steps to strengthen your credit score to buy a house:
Get free copies of your credit reports from each of the three credit bureaus — Experian, Equifax and TransUnion — and dispute any errors that could hurt your score.
Pay all your bills on time, and keep credit card balances as low as possible.
Keep current credit cards open. Closing a card will increase the portion of available credit you use, which can lower your score.
Getting ready to buy a home? We’ll find you a highly rated lender in just a few minutes.
Enter your ZIP code to get started on a personalized lender match.
4. Explore mortgage options
A variety of mortgages are available with varying down payment and eligibility requirements. Here are the main categories:
Conventional mortgages are not guaranteed by the government. Some conventional loans targeted at first-time buyers require as little as 3% down.
FHA loans are insured by the Federal Housing Administration and allow down payments as low as 3.5%.
USDA loans are guaranteed by the U.S. Department of Agriculture. They are for rural home buyers and usually require no down payment.
VA loans are guaranteed by the Department of Veterans Affairs. They are for current and veteran military service members and usually require no down payment.
You also have options when it comes to the mortgage term. Most home buyers opt for a 30-year fixed-rate mortgage, which is paid off in 30 years and has an interest rate that stays the same. A 15-year loan typically has a lower interest rate than a 30-year mortgage, but the monthly payments are larger.
» MORE: Calculate a 15-year vs. 30-year mortgage
5. Research first-time home buyer assistance programs
Many states and some cities and counties offer first-time home buyer programs, which often combine low-interest-rate mortgages with down payment assistance and closing cost assistance. Tax credits are also available through some first-time home buyer programs.
» MORE: Find first-time home buyer programs in your state
6. Compare mortgage rates and fees
The Consumer Financial Protection Bureau recommends requesting loan estimates for the same type of mortgage from multiple lenders to compare the costs, including interest rates and possible origination fees.
Lenders may offer the opportunity to buy discount points, which are fees the borrower pays upfront to lower the interest rate. Buying points can make sense if you have the money on hand and plan to stay in the home for a long time. Use a discount points calculator to decide.
7. Get a preapproval letter
A mortgage preapproval is a lender's offer to loan you a certain amount under specific terms. Having a preapproval letter shows home sellers and real estate agents that you're a serious buyer, and can give you an edge over home shoppers who haven’t taken this step yet.
Apply for preapproval when you're ready to start home shopping. A lender will pull your credit and review documents to verify your income, assets and debt. Applying for preapproval from more than one lender to shop rates shouldn't hurt your credit score as long as you apply for them within a limited time frame, such as 30 days.
» MORE: Get preapproved for a mortgage
8. Choose a real estate agent carefully
A good real estate agent will scour the market for homes that meet your needs and guide you through the negotiation and closing process. Get agent referrals from other recent home buyers.
Interview at least a few agents, and request references.
When speaking with potential agents, ask about their experience helping first-time home buyers in your market and how they plan to help you find a home.
» MORE: How to find a real estate agent
9. Pick the right type of house and neighborhood
Weigh the pros and cons of different types of homes, given your lifestyle and budget. A condominium or townhome may be more affordable than a single-family home, but shared walls with neighbors will mean less privacy. Don't forget to budget for homeowners association fees when shopping for condos and townhomes, or houses in planned or gated communities.
Another option to consider is buying a fixer-upper — a single-family home in need of updates or repairs. Fixer-uppers usually sell for less per square foot than move-in ready homes. However, you may need to budget extra for repairs and remodeling. Renovation mortgages finance both the home price and the cost of improvements in one loan.
» MORE: Decide whether to buy, build or renovate
Think about your long-term needs and whether a starter home or forever home will meet them best. If you plan to start or expand your family, it may make sense to buy a home with extra room to grow.
Check out potential neighborhoods thoroughly. Choose one with amenities that are important to you, and test out the commute to work during rush hour.
10. Stick to your budget
A lender may offer to loan you more than what is comfortably affordable, or you may feel pressure to spend outside your comfort zone to beat another buyer’s offer. To avoid financial stress down the road, set a price range your budget, and then stick to it.
Look at properties below your price limit to give some wiggle room for bidding in a competitive market.
» MORE: How to make an offer on a house
11. Make the most of open houses
Online 3D home tours have become more popular amid the COVID-19 pandemic. These tours let shoppers virtually walk through a home at any hour and observe details that regular photos don't catch. They don't supply all the information in-person visits do — how the carpets smell — but they can help you narrow the list of properties to visit.
Open your senses when touring homes in person. Listen for noise, pay attention to any odors and look at the overall condition of the home inside and out. Ask about the type and age of the electrical and plumbing systems and the roof.
» MORE: How 3D home tours work
12. Pay for a home inspection
A home inspection is a thorough assessment of the structure and mechanical systems. Professional inspectors look for potential problems, so you can make an informed decision about buying the property. Here are some things to keep in mind:
Standard inspections don’t test for things radon, mold or pests. Understand what's included in the inspection and what other inspections you might need.
Make sure the inspector can get to every part of the house, such as the roof and any crawl spaces.
Traditionally the buyer attends the inspection. By following the inspector around you can get a better understanding of the home and ask questions on the spot. If you can't attend the inspection, review the inspector's report carefully and ask about anything that's unclear.
» MORE: Types of home inspections buyers should know
13. Negotiate with the seller
You may be able to save money by asking the seller to pay for repairs in advance or lower the price to cover the cost of repairs you’ll have to make later. You may also ask the seller to pay some of the closing costs. But keep in mind that lenders may limit the portion of closing costs the seller can pay.
Your negotiating power will depend on the local market. It's tougher to drive a hard bargain when there are more buyers than homes for sale. Work with your real estate agent to understand the local market and strategize accordingly.
14. Buy adequate home insurance
Your lender will require you to buy homeowners insurance before closing the deal.
Home insurance covers the cost to repair or replace your home and belongings if they're damaged by an incident covered in the policy.
It also provides liability insurance if you're held responsible for an injury or accident. Buy enough home insurance to cover the cost of rebuilding the home if it's destroyed.